AMENDMENT AND SUPPLEMENT NO. 2 TO THE STOCK PURCHASE AGREEMENT
EXHIBIT 10.3
AMENDMENT AND SUPPLEMENT NO. 2 TO THE STOCK PURCHASE AGREEMENT
THIS AMENDMENT AND SUPPLEMENT NO. 2 TO THE STOCK PURCHASE AGREEMENT (this “Agreement”)
is made as of February 29, 2008, among Capella Holdings, Inc., a Delaware corporation (the
“Company”), GTCR Fund VIII, L.P., a Delaware limited partnership (“Fund VIII”),
GTCR Fund VIII/B, L.P., a Delaware limited partnership (“Fund VIII/B”), and GTCR Co-Invest
II, L.P., a Delaware limited partnership (“GTCR Co-Invest”, and together with Fund VIII and
Fund VIII/B, the “Purchasers”). Except as otherwise indicated herein, capitalized terms
used and not otherwise defined herein have the meanings ascribed to such terms in the Purchase
Agreement (as defined below).
WHEREAS, the Company and the Purchasers are parties to a Stock Purchase Agreement dated as of
May 4, 2005 (as amended hereby and as may be amended, the “Purchase Agreement”);
WHEREAS, the Purchasers desire to purchase, and the Company desires to sell, an aggregate of
102,000.000 shares of Preferred Stock for an aggregate purchase price of $102,000,000.00, including
92,458.259 shares of Preferred Stock pursuant to Section 1B(b) of the Purchase Agreement;
and
WHEREAS, the Company and the Purchasers desire to amend the Purchase Agreement as set forth
herein pursuant to Section 7D of the Purchase Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendment of Section 1B(b). The fourth sentence of Section 1B(b)
of the Purchase Agreement is hereby deleted in its entirety and replaced with the following
sentence:
“In order to implement the foregoing, the Purchasers may purchase from time
to time after the Initial Closing, upon the written request of the Board in
connection with an Approved Use, first, up to an aggregate of 25,000,000
shares of Common Stock at a price of $0.08 per share and, thereafter, up to
an aggregate of 196,000.000 shares of Preferred Stock at a price of
$1,000.00 per share (as adjusted from time to time as a result of stock
dividends, stock splits, recapitalizations and similar events) (each such
purchase, a “Subsequent 1B(b) Closing”). Each Subsequent 1B(b)
Closing and the Subsequent 1C Closing (as defined in Section 1C
below) are hereinafter referred to as a “Subsequent Closing”.”
Section 2. Addition of Section 1C. The following provision is hereby added to the
Purchase Agreement as Section 1C:
“Subject to the terms and conditions set forth herein, including the
conditions to the Purchasers’ obligations to acquire Investor Securities set
forth in Section 2M below, the Purchasers shall acquire 9,541.741
shares of Preferred Stock at a price of $1,000.00 per share (as adjusted
from time to time as a result of stock dividends, stock splits,
recapitalizations and similar events) (the “Subsequent 1C Closing”).
For purposes of clarification, it is not intended that any of the Executives
would be required to acquire Preferred Stock pursuant to the Senior
Management Agreements in connection with the acquisition of Preferred Stock
by the Purchasers pursuant to this Section 1C.”
Section 3. Amendment of Section 5. Effective from and after the date hereof,
Section 5B(b) of the Purchase Agreement is hereby deleted in its entirety and replaced with
the following provision:
“There are no statutory or, to the best of the Company’s knowledge,
contractual securityholders preemptive rights or rights of refusal with
respect to the issuance of the Preferred Stock and Common Stock hereunder or
the issuance of the Preferred Stock and Common Stock pursuant to Section
1B(b) or Section 1C, except as expressly contemplated in the
Stockholders Agreement, the Senior Management Agreements, the Certificate of
Incorporation or as provided herein. Based in part on the investment
representations of the Purchasers in Section 7C hereof and of the
Executives in Section 1(f) of the Senior Management Agreements, the Company
has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its equity securities,
and the offer, sale and issuance of the Preferred Stock and Common Stock
hereunder and pursuant to Section 1B(b) and Section 1C
hereof do not and will not require registration under the Securities Act or
any applicable state securities laws. To the best of the Company’s
knowledge, there are no agreements between the Company’s stockholders with
respect to the voting or transfer of the Company’s equity securities or with
respect to any other aspect of the Company’s affairs, except for the
Stockholders Agreement, the Certificate of Incorporation, the Senior
Management Agreements, the Registration Agreement and the Professional
Services Agreement.”
Section 4. Amendment of Section 5D. Effective from and after the date hereof, the
third sentence of Section 5D of the Purchase Agreement is hereby deleted in its entirety
and replaced with the following sentence:
“The execution and delivery by the Company of this Agreement, the Senior
Management Agreements, the Stockholders Agreement, the Registration
Agreement, the Professional Services Agreement, and all other agreements
contemplated hereby or thereby to which the Company is a party, the
offering, sale and issuance of the Preferred Stock and Common Stock
hereunder (including pursuant to Section 1B(b) and
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Section 1C) and the fulfillment of and compliance with the respective
terms hereof and thereof by the Company do not and will not (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii)
constitute a default under, (iii) result in the creation of any lien,
security interest, charge or encumbrance upon the Company’s equity
securities or assets pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body pursuant to, the Certificate of Incorporation of the
Company or the Bylaws of the Company or any law, statute, rule or regulation
to which the Company is subject, or any agreement, instrument, order,
judgment or decree to which the Company is a party or by which it is bound.”
Section 5. Amendment of definition of “Investor Preferred”. Clause (i) of the first
sentence of the definition of “Investor Preferred” in the Section 6 of the Purchase
Agreement is hereby deleted in its entirety and replaced with the following provision:
‘“(i) the Preferred Stock issued hereunder (including, without limitation,
pursuant to Section 1B(b) and Section 1C), and”.
Section 6. Amendment of definition of “Restricted Securities”. Clause (i) of the
first sentence of the definition of “Restricted Securities” in Section 6 of the Purchase
Agreement is hereby deleted in its entirety and replaced with the following provision:
‘“(i) the Preferred Stock and Common Stock issued hereunder and pursuant to
Section 1B(b) and Section 1C hereof and”.
Section 7. Amendment of Section 7A.
7A. Clause (i) of Section 7A of the Purchase Agreement is hereby deleted in its
entirety and replaced with the following clause:
“(i) the reasonable fees and expenses of their counsel arising in connection
with the negotiation and execution of this Agreement and the consummation of
the transactions contemplated by this Agreement (including, without
limitation, fees and expenses arising with respect to any subsequent
purchase of Common Stock or Preferred Stock pursuant to Section
1B(b) and Xxxxxxx 0X xxxxxx),”
0X. Xxxxxx (xxx) of Section 7A of the Purchase Agreement is hereby deleted in its entirety and
replaced with the following clause:
“(iii) stamp and other taxes that may be payable in respect of the execution
and delivery of this Agreement or the issuance, delivery or acquisition of
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any Common Stock or Preferred Stock purchased hereunder or in accordance
with Section 1B(b) or Section 1C hereof,”
Section 8. Authorization and Closing.
8A. Authorization of the Preferred Stock. The Company has authorized the issuance and
sale to the Purchasers of 102,000.000 shares of Preferred Stock (the “Shares”) in the
aggregate, having the rights and preferences set forth in the Certificate of Incorporation.
8B. Purchase and Sale of Preferred Stock pursuant to Section 1B(b) of the Purchase
Agreement. At the Closing (as defined in Section 8D below), pursuant to Section
1B(b) of the Purchase Agreement and subject to the terms and conditions set forth herein, for
an aggregate purchase price of $92,458,259.00, (i) Fund VIII shall purchase from the Company, and
the Company shall sell to Fund VIII, 78,298.831 shares of Preferred Stock at a price of $1,000 per
share, (ii) Fund VIII/B shall purchase from the Company, and the Company shall sell to Fund VIII/B,
13,741.516 shares of Preferred Stock at a price of $1,000 per share and (iii) GTCR Co-Invest shall
purchase from the Company, and the Company shall sell to Co-Invest, 417.911 shares of Preferred
Stock at a price of $1,000 per share. The Shares purchased by the Purchasers hereunder constitute
Securities, Investor Preferred, Investor Securities and Restricted Securities under the Purchase
Agreement.
8C. Purchase and Sale of Preferred Stock pursuant to Section 1C of the Purchase
Agreement. At the Closing, pursuant to Section 1C of the Purchase Agreement and
subject to the terms and conditions set forth herein, for an aggregate purchase price of
$9,541,741.00, (i) Fund VIII shall purchase from the Company, and the Company shall sell to Fund
VIII, 8,080.481 shares of Preferred Stock at a price of $1,000 per share, (ii) Fund VIII/B shall
purchase from the Company, and the Company shall sell to Fund VIII/B, 1,418.132 shares of Preferred
Stock at a price of $1,000 per share and (iii) GTCR Co-Invest shall purchase from the Company, and
the Company shall sell to Co-Invest, 43.129 shares of Preferred Stock at a price of $1,000 per
share. The Shares purchased by the Purchasers hereunder constitute Securities, Investor Preferred,
Investor Securities and Restricted Securities under the Purchase Agreement.
8D. The Closing. The closing of the purchase and sale of the Shares pursuant to
Sections 8B and 8C above (the “Closing”) shall take place at the offices of
Xxxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m., or by
facsimile and nationally recognized courier services, effective as of the date hereof. At the
Closing, the Company shall deliver to each Purchaser one or more stock certificates evidencing the
Shares to be purchased by such Investor, registered in such Investor’s name, upon payment of the
purchase price thereof by a cashier’s or certified check, or by wire transfer of immediately
available funds to such account as designated by the Company.
Section 9. Representations and Warranties of the Company. As a material inducement
to the Purchasers to enter into this Agreement and purchase the Shares, the Company hereby
represents and warrants to the Purchasers that the execution, delivery and performance of this
Agreement and all other agreements contemplated hereby to which the Company is a party
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have been
duly authorized by the Company. This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms. The execution and delivery by the Company of
this Agreement, the offering, sale and issuance of the Shares hereunder and
the fulfillment of and compliance with the respective terms hereof and thereof by the Company,
do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions
of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the equity securities or assets of the Company or any of its
Subsidiaries pursuant to, (iv) give any third party the right to modify, terminate or accelerate
any obligation under, (v) result in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative or governmental
body pursuant to, the Certificate of Incorporation or Bylaws or the certificate of incorporation or
bylaws (or comparable governing documents) of any of the Company’s Subsidiaries, or any law,
statute, rule or regulation to which the Company or any of its Subsidiaries is subject, or any
agreement, instrument, order, judgment or decree to which the Company or any of its Subsidiaries is
a party or by which it is bound. The representations and warranties contained in Section 5 of the
Purchase Agreement are true and correct at and as of the Closing as though then made, except to the
extent of changes caused by the transactions expressly contemplated by the Purchase Agreement or by
the other Transaction Documents and except for changes occurring in the ordinary course of the
Company’s and its Subsidiaries’ businesses that have not had a material adverse effect on the
financial condition, operating results, assets or operations of the Company or any Subsidiary
(including the filing of any material litigation against the Company or any Subsidiary or the
existence of any material dispute with any Person that involves a reasonable likelihood of such
litigation being commenced).
Section 10. Purchasers’ Investment Representations. Each Purchaser hereby represents
that such Purchaser is acquiring the Shares pursuant hereto for its own account with the present
intention of holding such securities for purposes of investment, and that it has no intention of
selling such securities in a public distribution in violation of the federal securities laws or any
applicable state securities laws; provided that, nothing contained herein shall
prevent such Purchaser and any subsequent holders of the Shares from transferring such securities
in compliance with the provisions of Section 4 of the Purchase Agreement.
Section 11. Miscellaneous.
11A. Remedies. Each holder of Investor Securities shall have all rights and remedies
set forth in this Agreement, the Purchase Agreement, the Certificate of Incorporation, the Bylaws,
the Registration Agreement and the Stockholders Agreement and all rights and remedies that such
holder has been granted at any time under any other agreement or contract and all of the rights
that such holder has under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any material breach of any provision of this Agreement
and to exercise all other rights granted by law.
11B. Legends. Each certificate for the Shares issued pursuant to this Agreement shall
be imprinted with a legend in substantially the following form:
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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
FEBRUARY 29, 2008 AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS
AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE CONDITIONS SPECIFIED IN THE STOCK PURCHASE AGREEMENT, DATED
AS OF MAY 4, 2005, AS AMENDED, BY AND AMONG THE ISSUER (THE
“COMPANY”) AND CERTAIN PURCHASERS, AND THE COMPANY RESERVES THE
RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE
BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS
SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST
AND WITHOUT CHARGE.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS,
A FULL STATEMENT OF ALL OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF
STOCK OR SERIES THEREON AUTHORIZED TO BE ISSUED BY THE COMPANY AND THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS.”
11C. Consent to Amendments. Except as otherwise expressly provided herein, the
provisions of this Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Majority Holders. No other course of dealing between the Company and
the holder of any Shares or any delay in exercising any rights hereunder or under the Certificate
of Incorporation shall operate as a waiver of any rights of any such holders. For purposes of this
Agreement, shares of Preferred Stock or Common Stock held by the Company or any of its Subsidiaries
shall not be deemed to be outstanding.
11D. Survival of Representations and Warranties. All representations and warranties
contained herein or made in writing by any party in connection herewith shall survive the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by an Purchaser or on its behalf.
11E. Successors and Assigns. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, and whether or not any express assignment has been made,
the provisions of this Agreement that are for each Investor’s benefit as a purchaser or holder of
the Shares are also for the benefit of, and enforceable by, any subsequent holder of the Shares.
The rights and obligations of each Purchaser under this Agreement and the agreements
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contemplated
hereby may be assigned by such Purchaser at any time, in whole or in part, to any investment fund
managed by GTCR Xxxxxx Xxxxxx, L.L.C. or GTCR Xxxxxx Xxxxxx XX, L.L.C. or any successor thereto.
11F. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.
11G. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts (including by means of telecopied signature pages), any one of which need not contain
the signatures of more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
11H. Governing Law. All issues and questions concerning the construction, validity
and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than the
State of Delaware.
11I. Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given when (i) delivered personally to the recipient, (ii) sent to the recipient by
reputable express courier service (charges prepaid), (iii) mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, or (iv) telecopied to the recipient
(with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that
same day) if telecopied before 5:00 p.m. Chicago, Illinois time on a business day, and otherwise on
the next business day. Such notices, demands and other communications shall be sent to the
Purchasers and to the Company at the addresses indicated in the Purchase Agreement or to such other
address or to the attention of such other person as the recipient party has specified by prior
written notice to the sending party.
11J. Approved Use. The Purchasers hereby approve the Company’s use of the funds
received pursuant to this Agreement with respect to the Preferred Stock acquired by the Purchasers
pursuant to Section 1B(b) of the Purchase Agreement as an Approved Use.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment and Supplement No. 2 to
the Stock Purchase Agreement effective as of the date first written above.
| CAPELLA HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxx III | |||||
| Name: | Xxxxxx X. Xxxx III
|
|||||
| Its: | ||||||
| GTCR FUND VIII, L.P. | ||||||
| By: Its: |
GTCR Partners VIII, L.P. General Partner |
|||||
| By: Its: |
GTCR Xxxxxx Xxxxxx XX, L.L.C.
General Partner |
|||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: | Xxxxxx X. Xxxxx
|
|||||
| Its: | ||||||
| GTCR FUND VIII/B, L.P. | ||||||
| By: Its: |
GTCR Partners VIII, L.P.
General Partner |
|||||
| By: Its: |
GTCR Xxxxxx Xxxxxx XX, L.L.C.
General Partner |
|||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: | Xxxxxx X. Xxxxx
|
|||||
| Its: | ||||||
| GTCR CO-INVEST II, L.P. | ||||||
| By: Its: |
GTCR Xxxxxx Xxxxxx XX, L.L.C.
General Partner |
|||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: | Xxxxxx X. Xxxxx
|
|||||
| Its: | ||||||
[Signature
Page to Amendment and Supplement No. 2 to Stock Purchase Agreement]
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